Wal-Mart Stores Inc.
WMT 0.34%
said it has taken full ownership of Yihaodian, its Chinese e-commerce venture, solidifying the online retailer as a central part of its strategy in the region.

Earlier this month, the co-founders of Yihaodian announced their departures, adding to speculation that Wal-Mart planned to add to its then-51% stake in the online retailer.

“With full ownership of Yihaodian, Walmart plans to invest in both accelerating e-commerce and creating a seamless experience for customers across online, mobile and stores,” the company said in a statement.

Wal-Mart acquired the remaining Yihaodian shares from Ping An of China, a financial services group, and the co-founders, former Chairman Yu Gang and former CEO Lui Junling, who both left earlier this month. Lu Wang, president and CEO of Walmart Global eCommerce in Asia, will lead Yihaodian as part of his overall executive responsibilities, Wal-Mart said in a statement.

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Wal-Mart didn’t disclose the terms of the deal. The company has said in fiscal 2016 it plans to invest between $1.2 billion and $1.5 billion in e-commerce efforts globally, as competition from Amazon.com Inc. becomes more acute. The Yihoadian purchase is included in that estimate, the company said.

Wal-Mart is trying to improve its Chinese operations in part by moving away from expanding its brick-and-mortar presence to focusing on China’s online shopping boom. Its store operations in China have been lackluster. Traffic in its more than 400 Chinese stores has fallen over the past three years and was down 8.9% in the most recent quarter though sales rose slightly. Still, the company plans to open 115 new stores across China by 2017.

Now Wal-Mart is trying to link Yihaodian with its stores to allow shoppers to order products on their mobile devices and pick them up in its stores or have them delivered to their homes.

Expanding online in China is critical for Wal-Mart, as consumers have been moving rapidly online and sales growth at brick-and-mortar stores is slowing. China’s e-commerce market increased 49% last year—after gains in the prior three years of 59%, 51% and 70%, respectively. In 2013, China overtook the U.S. as the world’s biggest e-commerce market, and last year the country rang up $453 billion in sales online, 11% of all retail sales.

The online grocery market is also gaining traction. Nearly half of Chinese consumers are already buying groceries on the web, compared with just a quarter of global consumers, according to a Nielsen survey of 30,000 consumers. Last year, 42% of skin-care sales were online, Nielsen said.

Yihaodian is a big part of Wal-Mart’s plans for China, but it’s a tiny player in the country’s e-commerce landscape, which is dominated by e-commerce giants Alibaba Group Holding Ltd. and second-largest player JD.com. Wal-Mart acquired a majority stake in Yihaodian in 2012.